Real Estate

Acquiring property in Australia just became harder for both locals and foreigners. Just a month after Australian lenders clamped down on foreign property buyers, especially Chinese, Westpac says on Wednesday it would crackdown again on foreign and local property purchasers.

An apartment buyer purchased on Friday off-the-plan a luxury penthouse unit in Sydney for $27 million, breaking Australia’s apartment record for the second time in just one day. Priced at more than $95,000 per square metre, the record-breaking flat is a four-bedroom unit measuring 280 square metres at the upcoming Opera Residences on Circular Quay.

Ahead of a forecast of house price drops in key Australian cities in 2018, latest reports show that there is no slowdown in the rise of home prices in big east coast cities. Latest CoreLogic figures say prices of dwelling units went up by an average of 0.5 percent across Australia in October.

All eyes in Australia are on the sale of the S. Kidman cattle empire which Hancock Prospecting and BBHO syndicate are competing. While the bidding process is still ongoing, another giant property deal was closed in Melbourne with a couple selling their sheep farm in Wyndham Vale for $95 million.

The BBHO syndicate would compete with Gina Rinehart’s Hancock Prospecting in bidding for the S. Kidman cattle empire. Sterling Buntine from BBHO told the Kidman board on Sunday it would lodge a bid this week for all shares of Kidman.

In spite of not just falling, but very low, interest rates, a growing number of Australians find it hard to meet their mortgage payments. Part of the reason behind the financial hardship is the end of the mining boom which affected some Australian states over the others.

Even if Chinese demand for houses in key markets such as Sydney and Melbourne has not been dampened by tighter lending rules to foreign borrowers, prices of units in the two Australian cities are expected to go down in 2018. AMP Capitals sees prices dipping between 5 percent and 10 percent.

HSBC says the clampdown on foreign property buyers by Australian banks failed to dampen the demand for Australian real estate by Chinese purchasers. Because of the surge of Chinese buyers in recent years, a sudden slowdown in demand from China is considered potential risk to house prices in key markets such as Sydney and Melbourne.

House prices in Australia registered strong growth for the second quarter of 2016 after a weak start during the first quarter. However, it was the slowest pace of growth in over three years, says the Australian Bureau of Statistics.

The 10,000 homes in Perth without tenants the past 12 months is just one of the indicators of the weakening Australian housing market. While house prices are rising ahead of the selling season, the fall in new home sales in July was larger than expected.

Australia’s richest woman Gina Rinehart is still on a buying mode of pastoral land after her Hancock Prospecting purchase in late July two more pastoral stations in the Northern Territory covering more than 550,000 hectares. She is reportedly planning to bid for the S. Kidman & Co pastoral empire.

Australian cities are enjoying a boon in property sales and appreciation of house values, except for a few cities such as Perth. In the last 12 months, the number of vacant homes in Perth reached 5.2 percent of the city’s rental house stock.

Tighter rules may have caused Chinese buyers to abandon their contracts to buy units in Sydney and Melbourne in Australia, but Australian property agents are using an app to convince them to buy. The app, WeChat, has 762 million monthly active users in China as of first quarter of 2016.

No less than the governor of the Reserve Bank of Australia, Glenn Stevens, has said on Wednesday that many Australian renters would need parental help to buy a property in Sydney. However, there is a way for one lucky person to own a $3.8-million beachfront home in Sydney for only $5.

It is not just Chinese property investors who have difficulty coming up with the dollars to buy apartment units in Sydney. Even young adult Australians also find it hard to move up the property ladder from tenants to homeowners without their parents’ help.

Even if Chinese buyers of apartments in Sydney and Melbourne are abandoning their purchase contracts because of tighter lending rules in Australia and stringent foreign currency regulations in China, the property market down under continues to thrive. One indicator is the number of suburbs where house median prices is higher than $1 million has gone up.

The warning of a property funding crisis in Australia has come to pass as potential Chinese buyers of apartment units in the country are walking away from their contracts. The crisis is most felt in Sydney, according to Harry Triguboff, a developer and the largest apartment owner in the city.

Australia’s property market has shown signs of recovery as house prices in six Australian capital cities slightly improved in the second quarter of 2016. However, results of the latest ANZ-Property Council Survey shows Australians continue to lose confidence in the market.